Barclays Capital is setting up a cross-product structuring desk in Japan as part of its plans to become a major credit derivatives house and is also readying its first third-party CDO in the U.S. In Japan, the firm has hired credit derivatives veteran Ken Koh, managing director of the credit derivatives structuring group at JPMorgan in Tokyo, to spearhead the structuring effort. Koh said he will structure plain-vanilla and hybrid instruments, using credit, interest rate, foreign exchange and equity derivatives.
Meanwhile, the firm is in the final stages of structuring its first third-party managed synthetic collateralized debt obligation in the U.S. The deal, which is expected to be price by the summer, will be approximately USD1.5 billion and referenced to around 150 credit-default swaps, according to Eileen Murphy, global head of CDOs in New York.
Murphy said the CDO is being developed as part of the firm's plan to establish itself as a major third-party CDO player. She joined Barclays in late 2001 from Chase Manhattan to spearhead the business. Murphy expanded the business into Europe by hiring Paul Varotsis, executive director in structured credit trading at Lehman Brothers in London and the European chairman of the International Swaps and Derivatives Association's credit derivatives market practice committee, and Olivier Staub, managing director and flow credit derivatives trader at Bear Stearns in London (DW, 12/8). Koh is the U.K. bank's most recent high-profile hire. He is a widely respected professional having been head of credit derivatives structuring at Bear Stearns in Tokyo before joining JPMorgan (DW, 10/7/01). "This is a solid hire for Barclays--they weren't really a player on the credit structuring side but this should give them a boost," said one market official.
Koh said he has a mandate to build up a team but said it was too early to comment on details, such as the potential number of hires.
He reports to Vince Balducci, global head of risk finance in New York, and Eric Bommensath, global head of fixed income in London. Bommensath and Balducci did not return calls.
At JPMorgan, Koh reported to Mahesh Bulchandani, managing director and head of structured credit products in Tokyo. Bulchandani confirmed the departure but declined further comment.
